My host is Mac OS X 10.6, and on my VWware Fusion, I have Windows 7 and Windows XP as my guest. I can drag and drop files between my guest and my host, but not between my guests (cannto drag and drop files between Windows 7 and Windows XP). Is it possible?

2 Answers
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No you cannot as of, and up to VMWare 4 drag and drop files between VMware guests directly. VMware's tools are only noted to support drag and drop between the guest and the Host Operating system (a.k.a. the Mac in this Case), there is no mention of guest to guest support for drag and drop as noted in the VMware fusion documentation.

Moving and Copying Files and Text Between Virtual Machines and Your Mac

You can drag files and folders to move and copy them between your virtual machines and your Mac.

You can move text by copying and pasting or cutting and pasting.

You can also drag images between Windows applications and Mac applications.

You can drag Outlook attachments from a Windows virtual machine to your Mac.

You can drag files in a virtual machine directly onto Mac applications.

You can copy and paste images and formatted text between a Windows or Linux virtual machine and your Mac.

These features require VMware Tools.

That quoted above is likely why drag and drop is not working between your Windows 7 and Windows XP guest virtual machines and that is because it is simply not supported.

A quick fix is to drag the files to the Mac host first, then drag to the other VM. Otherwise setting up File Sharing between the VMs may be the best way to transfer files directly between VMs without having to go though the host first.